Ukraine and coal

Ukraine is a major coal producer. The U.S. Geological Survey reports that in 2006 the Ukraine produced 75.8 million tonnes but had announced plans for a major expansion to 100 million tonnes in 2008.

The US Energy Information Administration states that "the country's coal industry, which counts slightly less than 200 mines and employs about 500,000 people, is managed by a hierarchy of state organizations and suffers from numerous problems including labor strikes, hazardous working conditions, inefficiency and low productivity. Ukraine has the world's second-highest mining fatality rate, with an average of 317 deaths a year since 1990. Only in China is the fatality rate higher."

Coal mining
While the coal sector is currently dominated by state-owned mining companies, the USGS reports that "the country’s coal mines were subject to chronic financial distress and only limited efforts had been made to improve their performance." Approximately 90% of Ukraine's hard coal comes from the Donets coal basin where in 2006 there were approximately 225 operating mines which produced 130 million tonnes. The remainder of the hard coal came from the Lviv-Volynskiy Basin in Western Ukraine where 18 mines produce approximately 6 million tonnes a year.

Approximately 7 million tonnes of brown coal is mined from the Dnipr Basin in Central Ukraine.

While government owned operations are declining, ambitious plans have been announced to faciliate a rapid expansion of new mines. The USGS reports that in 2005 Ukraine’s Coal Industry Ministry "selected seven of the most promising hard coal deposits with combined reserves in excess of 1 Gt for development. The seven new mines, if developed, would have a combined capacity to produce 17.7 Mt/yr of coal. Ukraine’s energy strategy for the period to 2030, which was approved by the Government in 2006, called for increasing coal output to 130.3 Mt."

The USGS also reports that the Coal Industry Ministry is promoting the rapid expansion of the brown coal mining sector too. The USGS reports that in August 2005 called for private sector bids foir proposals to develop the "two deposits — the Aleksandriiskoye deposit, which has brown coal reserves reported to be 485 Mt, of which 63 Mt were considered suitable for open pit development, and the Verkhnedniprovskoye deposit, which has reported reserves of 236 Mt, for which the explored sections were considered suitable for open pit development. The Ministry calculated that these deposits have the potential to produce between 5 and 6 Mt/yr of brown coal by open pit mining. Mines at the deposits were projected to come onstream in 2 years once development begins."

Coal fired power stations
The US Energy Information Administration reports that Ukraine's power sector "is the twelfth-largest in the world in terms of installed capacity, with 54 gigawatts (GW)". However, since gaining independence both generation and consumption dropped dramatically resulting in approximately 50% over-capacity. While power exports have increased and new nuclear power stations been commissioned, substantial investment is required in maintaining and upgrading the transmission and distribution system.

Coal-fired power stations financed by international public investment institutions
The Starobeshev power station is a coal-fired power station in eastern Ukraine. The Environmental Defense Fund reports that financing from a mulilateral development bank for the "supply and installation of a 210 MW fluidised bed boiler with ancillary equipment at Unit 4 of the Starobeshevo Power Station".

Companies
The Ukrainian financial and industrial holding company System Capital Management’s energy business, Donbass Fuel-Energy Complex (DTEK) (Russian: Tопливно-энергетический комплекс Донбассa), generates 25.4% of all power produced by Ukraine’s thermal power plants. DTEK is the first private vertically integrated power generating company of Ukraine. DTEK was formed in 2002, and is an association of 15 various enterprises vertically integrating the mining and refining of coal to the supplying of electricity. The main companies are Vostokenergo Power Generation Company, ServiceInvest Energy Company, and the coal mine Komsomolets Donbassa.

According to its website, the key strategic goal of DTEK is to become the largest company in the power energy field in Ukraine. DTEK companies account for one fifth of the country’s output of coal, producing 17.595 million tons of coal in 2008.

DTEK has three thermal power plants: Zuyevskaya, Kurakhovskaya, and Luganskaya run by Vostokenergo. In 2008 the electric power transmission volume constituted 13.51 million MW.

SCM's largest company is Metinvest, an international, vertically integrated mining and steel group of companies, comprising 23 industrial companies involved in the mining and steel industry of Ukraine and the Commonwealth of Independent States. In May 2009, SCM Holdings/Metinvest purchased the West Virginia-based United Coal Company for an estimated $1 billion. .

In 2007 the Division’s mines produced over 5.74 million tons of coal, and Avdeyevka Coke and Chemical Plant, which operates as a part of the Division, produced more than 3 million tons of blast furnace coke.

Related SourceWatch articles

 * Global use and production of coal
 * International Information on Coal
 * Ukraine and coal